Post the CC all builders ran emergency rights/placings to refinance, buy land & get out from under the cosh of bank debt/interest. Having comprehensively banjaxed the builders by cutting mortgage supply to customers, the banks gave 'emergency support' to the builders - whose l/b debt costs were eating them alive - at 20% pa: that's know as usury. Hence the refinancing etc. Now the builders & banks have a lovey-dovey-sweetiepie marvellous relationship; couldn't be better doncha kno. How much do the builders now borrow from the banks? Answer = nil. Most have massive cash balances, Curious that!

The preceding mgmt. at RED pretty much had steered the co full speed ahead Concordia like onto the rocks. It came within an ace of sinking. Hence the return of SM. So RED ran an emergency placing, but was the last quoted builder to go. Effectively the placing failed. But it had been underwritten personally by SM - which if memory serves me right cost him +£100m (plus he reversed his own private l/b into RED).

So all he's arguably done now is pull out the funding/share % he put into RED to refloat & save it, returning his holding roughly to the pre CC status quo. Not really a cause for concern in my book.

....sales by directors can sometimes be seen as a warning, but in this case given RDW's recent results, I hardly think Steve Morgan reducing his stake (as he reduces his role in the company) merits an 8% fall in the share price....still, it's allowed me to buy a few.....

"Demand for new housing in the UK remains "robust" despite an uncertain political and economic backdrop. That's the view of execs at LSE:RDW:Redrow as the company - and the wider sector - continues to make a mockery of warnings that the housing ..."

Announcement partially copied below. Buy-backs are not unusual although not not all shareholders preferred option.

The fact that the buyback will take Steve Morgan above 40% threshold and a waiver is being requested seems rather odd.

The announcement at the same time as notification of 10 PDMRs receiving substantial number of nil cost options at 4.0097 (60-150k shares) when the SP sits at 3.9 looks a bit generous and seems like poor judgement on several counts.

Redrow has performed well of late (although almost all builders have), the Board deserve to be rewarded appropriately, maybe this is appropriate but it should be seen to be so. Not sure these announcements fit that test.

H2

Proposed Resolution to Purchase Own Shares and Rule 9 Waiver

In accordance with Listing Rule 12.4.4, Redrow plc (the "Company") announces that the Board has decided to propose a resolution seeking general authorisation to make market purchases of up to 36,979,993 ordinary shares of the Company (representing 10 per cent. of the Company's issued share capital) subject to the requirements of the Listing Rules of the UK Listing Authority (the "Buy Back Resolution") at the Company's forthcoming annual general meeting (the "2016 AGM").

As a result of recent fluctuations in the Company's share price, the Board considers that it is appropriate for the Company to be in a position to buy back shares in the coming year if it would be in the best economic interests of the Company to do so. Accordingly, the Directors intend to propose the Buy Back Resolution at the 2016 AGM. It is the Directors' current intention to request authorisation annually going forward.

Since Steve Morgan has an interest in approximately 40.40 per cent. of the Company's issued share capital, any purchase of ordinary shares of the Company pursuant to the authority granted by the Buy Back Resolution would result in an obligation for Mr Morgan to make a general offer in accordance with Rule 9 of the City Code on Takeovers and Mergers (the "Code"). Therefore, the Board has also decided to ask independent shareholders to approve at the 2016 AGM a waiver by the Panel on Takeovers and Mergers (the "Waiver") of any such obligation following any increase in the shareholding of Mr Morgan or any person with whom Mr Morgan is acting in concert (as defined in the Code) up to a maximum of approximately 44.88 per cent. of the Company's share capital as a result of any exercise of the authority granted under the Buy Back Resolution (the "Waiver Resolution").

" Fearless contrarians buying into the post-Brexit fallout have already made a fortune out of Britain's decision to leave the EU. Take LSE:RDW:Redrow: the housebuilder has maintained its strong trading momentum since the referendum as the ..."

Always like to look at how a balance sheet is changing compared to profit/loss. Earnings pwer here is more like £400m a year. £10 a share stuff.

Won't get there as the market holds back on Redrow for some reason, but of course we are here as Redrow is small enough to be bought, and Steve Morgan is going to want out eventually. He won't just retire like last time and watch someone else make a mess of things.

There must be a mistake here.
The 5 year low for Redrow is about 105.9 --- today it's still 312.2

Some way to go to get close to a 5 year low, although it may never do so of course.

Redrow is undoubtedly a well run company, but if the market gets taken away from you, no amount of excellent management can compensate fully.

If fear grips the housing market could all but stall. In 2012 Redrow had a revenue of about £480M and a pre-tax profit of £43M. Today it's £1.3Bn and £238M so it's a much bigger company. However, even a fall in revenue of 30% would probably have a disproportionately larger % fall in profits -- so who knows where the stock price and the dividend would end up.

"Housebuilders have been demolished since the Brexit vote, but Harriet Mann finds Redrow in great health. Is the sell-off overdone?The UK's Brexit vote has swung a wrecking ball across the housebuilders as investors fearing a housing crash pulled ..."

"Housebuilders have been demolished since the Brexit vote, but Harriet Mann finds Redrow in great health. Is the sell-off overdone?The UK's Brexit vote has swung a wrecking ball across the housebuilders as investors fearing a housing crash pulled ..."

Interesting comment. The ECB are being very coy who got what in the latest bank funding round. If their pan European funding was allocated on a per capita pro rata basis then the UK banks would have received ca £40bn (& our population is similar to Italy). This is cash for 4 years @ 0% interest max (& indeed possibly a negative interest rate - ie you're being paid to take it). In the UK sooner or later this will find its way into the mortgage market, producing rock bottom rates. The cash is actually available to the banks tomorrow.

"but when one reads results (including an outlook statement) like these you think - Crisis? What Crisis?"

Indeed, very positive- even for the days post result, but of course the IMS is largely backward looking and markets try to be very forward looking, attempting to value NPV of 10 or 15 years earnings. That calculation probably does look rather different today than last Wednesday and of course no one of knows by how much.

We know that several Italian Banks have come for $40bn additional funding, unclear if that is a one off or start of something nasty which will hit credit etc. The Government looks to be in poor state to manage the situation and the opposition looks to be in no state for anything.

On balance I think that the house builders are in pretty good shape to ride this out, but not without risks.

I am Trying to understand why there are jitters in the property sector.

'Someone is selling again today. Redrow is now on a future PE of 9 and 8 for the next year. With the report from Bellway this seems a wee bit low. However, when you look at the overall sector all builder shares seem to be down 10/15% from their highs.It is almost as if the market has de-rated the house builders sector and looking at the NAV of each company and pushing the SP figures to reflect historical valves of 1.5-2 x book valve and forgetting about the PE's'http://www.lse.co.uk/ShareChat.asp?ShareTicker=RDW

"Having warned that this financial year would not be as dazzling as the last, the market clearly wasn't expecting much from LSE:RDW:Redrow's half-year results. They were wrong. Profit almost doubled to a new record and the confident housebuilder ..."

Mr Carney again.....its like hes directly/indirectly controlling the expansion and contraction of credit availability and its effecting the housing market!....as an aside I dont have the chart open but if I remember 240p area was a big supp/res for RDW as well.

Can Housebuilders really rely on house prices rising to support profits their market?

Residential Developers have a WIP at the moment that is carrying build cost losses, which is dependent on the house prices rises to be eliminated.

The build cost will only increase as we come out of a recession from employees and material producers.

Employees seek wage increases; this is being brought on by the mobility in the job market and the enhanced expectations of the job seeker. Job mobility will also further extend the build programme as the staff change through knowledge lag and employment timing, so escalating build costs.

Material producers are increasing prices and restricting production levels at present. Price increases are inevitable, but producers will see this as an opportunity to increase their prices more than inflation, spurred on by the significant profits that developers announced recently. Producers are also applying supply and demand pressure through limiting production, so allowing them to increase prices. Material production levels are being limited for a number of reasons part as leverage for unit price, part increase demand from developers, part the expected lag in the gearing up factories, plant and skilled labour for the increased demand and in some part lack of confidence in the status of the economy. The limited material production levels in turn will also extend the duration of build programmes putting a strain on the WIP and increase preliminaries and financing costs.

As the planned expansions of residential developments from the last government comes out of the process planning process for building out, this will only have increased effect on costs. As there are tens of thousands of plots ready to be built out from the infills between/around existing towns, across the country. Unless this is flow is limited it will means house prices may slow the increase in house prices and might stagnate house prices in some area as supply meets demand.

Also how long can the Government maintain state aid to what would seem a profitable sector and in turn maintaining artificially high house prices.

So a sector that could be squeezed from both sides - increased costs and falling/stagnating sale prices. We could see consolidation/withdrawal in this sector yet. Note: Skanska quits UK housebuilding market, has been today.

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